A handout picture made available on October 26, 2008 from the media office of Sheikh Mohammad bin Rashed al-Maktoum shows Sheikh Mohammad bin Rashid al-Maktoum, Vice President, Prime Minister and Defense Minister of the United Arab Emirates and Ruler of Dubai, walking through an aisle of the second Emirates Airline A380 superjumbo at Dubai international airport. The rich Gulf Emirate received the second A380 on October 24, 2008. Emirates, which is owned by the government of Dubai, is the largest customer of the A380. It has 58 on order in a deal worth about 18.8 billion dollars based on list prices. (AFP/Getty Images)
Blogger Finem Respice speculates on The Next Bubble.
Whatever it is, he says it is already here, and ready to pop.
He points out that many are speculating it is oil or energy or gold or high-beta stocks or even Treasuries.
He then states his belief that federal government is the next bubble to pop (state governments are already popping).
I will take his prediction one step further. I will take it global and say that the socialist promise of heaven on earth is the next bubble to pop.
In this prediction, I believe I have the agreement of Martin Armstrong, Anonymous, and even Another.
Anonymous asks and answers his own question:
What was the motivation behind freegold !?
Politics,...I mean the (colluding) debt driven political economy,...lives on one single dynamic : We promise the sheeple heaven on earth, and...let themselves pay for it, dearly !
"The promise" is already popping as well as the ability of the sheeple to pay.
The new political class, meanwhile, is acting like children in a candy store, oblivious to deafening "POP".
In just the past week we have watched President Obama jet around the country like an Arab sheikh backed by oil wealth. Obama flies his 747 across the country to party with Harry Reid in Las Vegas. The cost of the trip is estimated at over half a million dollars. Then on to New York City to catch a Broadway show.
Obama has managed to spend more "money" in his first 100 days than all other presidents COMBINED.
(Wall Street Journal | Opinion) Mr. Obama's $3.6 trillion budget blueprint, by his own admission, redefines the role of government in our economy and society. The budget more than doubles the national debt held by the public, adding more to the debt than all previous presidents -- from George Washington to George W. Bush -- combined.
But who... or what is going to pay for this IN-YOUR-FACE profligacy? The rich? More taxes? China? Future generations?
No, no, no and no!
The answer is EVERYONE will pay. At least everyone who has any dollars, dollar-denominated financial assets, or anyone relying on fixed payments from a pension or even Social Security. They will ALL pay dearly for Obama to globetrot and party down like an Arab sheikh. And they will pay for both parties', virtually everyone in Washington DC's, misunderstanding of economics and money.
Neither side gets it.
We don't determine the value of the dollar.
The dollar right now has two problems.
First it must worry about usage demand. This is the day to day operational demand of the global economy. This demand is fading.
Second, it must worry about financial product demand. This is the demand from savings, storage of value, wealth preservation.
The financial product demand is severely impaired. Dollar-based assets of all kinds can no longer be trusted to retain value. Even Treasuries are extremely risky. When interest rates rise, liquidation value of Treasuries falls, trapping the buyer in the investment, forcing him to ride it out and hope that inflation doesn't eat away his value. And in an environment of rising interest rates, the purchase of bonds is an immediate loser, like buying a new car and driving it off the lot.
So from a supply and demand perspective, just when the supply of fresh dollars and fresh dollar-assets-for-sale (Treasuries) is peaking, demand is plummeting.
Even Master of the Bond Universe (MOBU) Bill Gross is saying run, don't walk...
June 3 (Bloomberg) -- Bill Gross, founder of Pacific Investment Management Co., advised holders of U.S. dollars to diversify before central banks and sovereign wealth funds ultimately do the same amid concern about surging deficits.
The only solution to this deadly conundrum is a massive devaluation of the dollar. Does it really matter WHO devalues the dollar? No, of course not. But as I wrote in The Judgement of Value:
The central banks, the printers of money, the governments, the treasuries, the powers-that-be have no say in the value of a dollar. That judgement of value is reserved for the recipient of those freshly printed dollars.
Even those of us that hold dollars, that hoard them in our mattresses or bank accounts, have no say in the value of those dollars. The people that we offer those dollars to have the power to judge their worth, and to decide how much time, labor or real goods they are willing to part with for a piece of paper.
So when Timmy Geithner tells the Chinese that we still believe in a strong dollar, he is only blowing hot, stinky air into the face of the judge himself.
It is the PRODUCERS of the world that have the power to judge the value of our dollars. The fate of the dollar is in their hands. Our political leaders believe they can control the value of the dollar through various means. They also believe they can control the global stock and bond markets. This disturbing fact is becoming more and more evident as each day passes.
But what is clear to anyone with half a brain is that today's status quo is not sustainable in ANY way. Something's gotta give. The bubble WILL POP! It has already begun.
"So," you ask, "if we are all going to pay dearly for Obama's jetsetting ways and Congress' profligate spending, what will we receive in return?"
The answer is nothing but pain. These final death throes of the socialists' promise of heaven on earth are only the final TWISTING of a knife that was thrust long ago. You will pay dearly in the near future for everything you received in the last thirty-odd years. The bill has now come due. There will be no present-day reward for the complete surrender of your treasure.
There is, however, one small loophole in this tax of doom. There is a very small window of opportunity and only limited seating for the show. "Freegold" is the name of the show, and it is not playing on Broadway. So I doubt the Obamas caught it.